Not as uniquely American as we think

It’s almost cliche to say that the U.S. doesn’t pay attention to health system models of other nations when considering reforms. Maybe so. But one might not draw that conclusion from descriptions like this:

In Switzerland and the Netherlands managed competition in health insurance markets requires that everyone purchase health insurance, with premium subsidies for lower-income people. Insurers must accept all applicants and may sell only policies that cover a structured set of benefits. Insurers must also “community rate” premiums for their policies—that is, insurers must sell a particular policy to everyone for the same premium, regardless of health status or claims history.

That’s from van Ginneken, Swartz, and Van der Wees in the latest issue of Health Affairs, and it’s not new information. For all our “uniquely American” ways and claims, the resemblance to the design of state health insurance exchanges is uncanny, no?

And how are the Swiss and Dutch models doing?

The competitive nature of the Swiss and Dutch insurance markets differs.The Dutch market shows robust premium competition even though 94 percent of the population is insured by the five largest insurers []. In contrast, the Swiss market has substantial variation in premiums even though the market is much less concentrated. The differences suggest that how markets are regulated is critically important for the success of incentives to increase market efficiency.

The article covers much more about those regulations, including the nature of risk adjustment systems and how consumers interact with insurers. It concludes with lessons for the U.S. Among them,

insurers cannot be expected to negotiate aggressively with providers, especially hospitals, over costs and quality of care unless they have bargaining power similar to that of providers. Insurers that sell policies in the exchanges may gain some market share, but it will not be sufficient to justify expectations that exchanges can help contain costs. It is likely that other measures will be needed to generate incentives for efficiency and cost containment.

Both the Swiss and Dutch include more centralized mechanisms of price control than the U.S. commercial market. They don’t impose government control of all prices. For example, the Swiss have something that sounds like all-payer rates established through negotiation between insurer and hospital associations. Dutch insurers negotiate with hospitals within a global budget framework while prices for most general practitioner services are regulated.

But who cares! The U.S. won’t follow a European model because one could never work here, right?


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